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Forex Patterns & Probabilities: Trading Strategies for Trending & Range-Bound Markets (Wiley Trading) [Hardcover]

Ed Ponsi (Author)
4.3 out of 5 stars  See all reviews (48 customer reviews)
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Forex Patterns & Probabilities: Trading Strategies for Trending & Range-Bound Markets (Wiley Trading) + Beat the Forex Dealer: An insider's look into trading today's foreign exchange market (Wiley Trading) + Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets (Wiley Trading)
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Editorial Reviews

Product Description

While most books on trading deal with general concepts and shy away from specifics, Forex Patterns and Probabilities provides you with real-world strategies and a rare sense of clarity about the specific mechanics of currency trading. Leading trading educator Ed Ponsi will explain the driving forces in the currency markets and will provide strategies to enter, exit, and manage successful trades. Dozens of chart examples and explanations will guide you each step of the way and allow the reader to "look over the shoulder" of a professional trader hard at work at his craft.

This book provides traders with step-by-step methodologies that are based on real market tendencies. The strategies in this book are presented clearly and in detail, so that anyone who wishes to can learn how to trade like a professional. It is written in a style that is easy to understand, so that the reader can quickly learn and use the techniques provided.

From the Inside Flap

In recent years, traders have turned to the foreign exchange market expecting to capture substantial profits. While the high availability of leverage within this arena can improve your chances of making money, ultimately the success of your endeavors depends upon how well you understand and operate within this market. Nobody knows this better than author Ed Ponsi. As a professional trader and leading educator of traders, Ponsi has developed a proven approach to trading today's forex market, and now, with Forex Patterns and Probabilities, he wants to share it with you.

While most books on trading deal with general concepts and shy away from specifics, Forex Patterns and Probabilities provides you with real-world strategies and a rare sense of clarity about the specific mechanics of currency trading that will allow you to take advantage of both trending and range-bound markets.

Written in a straightforward and accessible style, Forex Patterns and Probabilities will help you make the most of your time in this market. You'll be introduced to a variety of elements that are essential to forex trading success and discover the best ways to enter, exit, and manage trades. Dozens of chart examples and explanations will guide you each step of the way and allow you to "look over the shoulder" of a professional trader hard at work at his craft.

Divided into four comprehensive parts, this detailed guide:

  • Explains the playing field of the forex market, using powerful metaphors that relate trading scenarios to situations in everyday life

  • Outlines several specific trading strategies—including the FX-Ed Trend Technique—designed for trending markets

  • Delves into a variety of non-trending trading techniques—from the volatility-based Squeeze Play to the hedge fund–inspired Interest Rate Edge—which are all based on unique market tendencies

  • Offers an insider's view on how to emulate the behavioral patterns of successful professional traders—and how to escape the mindset of the amateur

  • And much more

Today's forex market contains some of the most profitable trading opportunities in the world. With the practical strategies and trading methodologies found in Forex Patterns and Probabilities you can uncover these opportunities and achieve long-term financial success along the way.

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Product Details

  • Hardcover: 272 pages
  • Publisher: Wiley (July 27, 2007)
  • Language: English
  • ISBN-10: 0470097299
  • ISBN-13: 978-0470097298
  • Product Dimensions: 9.1 x 6 x 1.1 inches
  • Shipping Weight: 1.1 pounds (View shipping rates and policies)
  • Average Customer Review: 4.3 out of 5 stars  See all reviews (48 customer reviews)
  • Amazon Bestsellers Rank: #165,465 in Books (See Top 100 in Books)
    #26 in  Books > Business & Investing > Finance > Foreign Exchange

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Ed Ponsi
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Front Cover | Front Flap | Table of Contents | First Pages | Index | Back Flap | Back Cover | Surprise Me!
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Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
dollar currency pair, one currency pair, forex market, zero pockets, forex traders, demo account, forex trading, average daily range, daily candle, pennant formation, counter currency, currency pairs, hourly chart, partial profit, protective stop, false breakouts, exchange rate rises, winning trades, institutional traders, daily chart, ascending triangle, symmetrical triangle, trading techniques, equity traders, uptick rule
Key Phrases - Capitalized Phrases (CAPs): (learn more)
New York, United States, Great Britain, New Zealand, Federal Reserve, Wall Street, Trend Technique, Bank of Japan, Greenwich Mean Time, Josep Giró
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Forex Patterns & Probabilities: Trading Strategies for Trending & Range-Bound Markets (Wiley Trading)
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Customer Reviews

48 Reviews
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Average Customer Review
4.3 out of 5 stars (48 customer reviews)
 
 
 
 
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54 of 62 people found the following review helpful:
4.0 out of 5 stars Clear and detailed strategies for the forex market, August 12, 2007
By daytrader0341 (Boston, MA United States) - See all my reviews
This review is from: Forex Patterns & Probabilities: Trading Strategies for Trending & Range-Bound Markets (Wiley Trading) (Hardcover)
Ed provides the basics of trading strategies that handle most of the forex market conditions. While many of these strategies have appeared eleswhere the explanations of why they work and why they should be followed is something that comes from years of trading experience. For example: why does forex often fail to breakout of support and resistance areas on the first or second attempt? How do the institutions maneuver the price during slow volume hours and how you can use this to advantage. Also the section on his trend following system is clearly thought out and easy to follow.

This is a book that I could really could have used 6 months ago and skipped most of the other stuff about trading. About the only thing missing is backtested results to show how well the systems work in real trading. But there are clear examples of each strategy.

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91 of 110 people found the following review helpful:
3.0 out of 5 stars Good but limited number of strategies which are not really new, September 1, 2007
This review is from: Forex Patterns & Probabilities: Trading Strategies for Trending & Range-Bound Markets (Wiley Trading) (Hardcover)
This is mostly for beginners. There are only good advices, so it is a good choice for beginners or those who need to be put back on tracks.

The number of strategies is in fact quite limited and not really new. I was expecting much more from the description. Ed just uses levels for entry and stops that could be slightly different than in some other books.
2 strategies about trending markets (FX-Ed and classic 2 time frame system), 1 for pennant/flags, a volatility breakout strategy, which is in fact a triangle strategy (for the entry). playing the round numbers, a range trading in the low volume opening, and a word about the carry trade.

The so-called FX-Ed trending strategy is based on moving averages. I have backtested it (it is easy, no place for interpretation for the version without partial exits and reload)and of course it works on strongly trending markets such EURUSD recently, but wait, any trending strategy worked!! The same strategy with pairs such as USDJPY generates a loss or a small gain between 1997 and 2005 and it was in fact quite good at buying tops and shorting bottoms, resulting in huge volatility of the equity curve.

Update: Backtest of the "round trip" (playing the round numbers). Only difference with the text is that the second target is a multiple of the first one instead of based on a previous R/S level. From Sept 2003 to Sept 2006, it does not work and looses for most pairs (including those preferred by the author). Even if we take only the first bounce, it looses.

Update2: Backtest of the "Boomerang", a range trading in the low volume opening. EURUSD only as suggested by Ed. Tested from Sept 2001 to Nov 2006. There is a profit growing steadily (though there are drawdowns) from Sept 2001 to May 2004. After that, it is flat. There are still trades, but they do not produce any profit, just breakeven. Has it stopped working after too much advertisement for it?

Page 217 is quite interesting. The author explains why it is not recommended to systematically take small profits such as 10 pips. I am wondering if the "strategy 10" advertised by one of the praisers of this book is compatible with this view. Anyway, Ed also says that those who recommend such thing may just want to profit from people by the "introducing broker" system, and so we must be careful.

The book progresses slowly, explaining every single detail. There are a few repeats in the first half of the book. For most charts, the horizontal labels are not displayed.

The book is 245 pages but the content is quite small because there are so many charts! The number of useless charts is amazing. He uses charts to illustrate any single information in the book. For example, a pair trending up (a chart), a pair trending down (a chart), a congestion (a chart), breakout from congestion (a chart), a strong trend (a chart), a moving average (a chart), a second moving average (a chart), a RSI (a chart), a fib retracement level (a chart). For a "strategy", an entry point (a chart), placement of the stop to be put after the entry (a chart), placing first target (a chart), second target (a chart), third target (a chart), tweaking the exit levels (1 chart per exit level!), Entry triggered (a chart), first target reached (a chart), the pair continues (a chart), it pulls back (a chart), it reaches the second target (a chart), and the third (a chart), etc... Well, don't you think that a few charts with gathering a few things on each of them would have been enough? It looks as if the book was the written version of a seminar. In fact, it probably is!
Page 204: Two times the same chart! The first chart was supposed to show only the entry (as usual), and the second the exit later on, but the first one already shows the exit! Good Ed, you are improving by putting both entry and exit on the same chart (you could save some trees by concentrating more information!!), but only one chart is necessary in this case!
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35 of 41 people found the following review helpful:
4.0 out of 5 stars A Solid work but too conservative, July 7, 2008
This review is from: Forex Patterns & Probabilities: Trading Strategies for Trending & Range-Bound Markets (Wiley Trading) (Hardcover)
A very good from-scratch discussion of the market and trading mechanics, nice overview of the fundemental reports, some actionable strategies laid out and well explained and a few genuine veteran insights thrown in to boot. Worth owning, especially if you're beginner to intermediate.

However, he's just too conservative. His setups are very good but you'll grow old waiting to see them. Example: calling for 4 (5, 20, 50, and 200 if I remember right) moving averages to fan out in proper order, on a daily chart, in order to qualify a trend. Yeah, it's definitely a trend, but by the time you get there, the trend's almost over. And you'll never get in on a retracement or a resumption that way. You'll control losses by never placing any trades. Nix at least one moving average, maybe even 2.

His focus is daily charts in general. Nothing wrong with that, but nowhere's near the money to made or lost as in the intraday charts. But he doesn't tell you that. He offers a flawed argument why his way is best, goes something like this: Using one of his ideal trendfollowing setups, he pulls of a trade that earns him something like 3000 in 4 months. Then he goes on to compare it to a 10 pip per trade goal and says even if you made your 10 pips per day, everyday, in that same period, with the same pair, you'd only score about 1700 pips instead of his 3000. Fair logic, but who says you'd only get 10 pips and quit? His 3000 pip rise is punctuated with enough ups and downs to score twice or 3 times that trading intraday. With less risk, given that his stops on a daily were as high as 155 pips, still pretty tight for a daily chart, yet that same 155 pips is an enormous stop on an hourly. Not to mention all the days that you won't be trading while you wait for 4 MA's to line up.

I'm not bashing the guy - he wrote a good book, better than alot of them out there, but know that his way is safe at the expense of returns. The one advantage is that his trades are not labor intensive, you can visit your broker site once a day to manage them. But only once. Not for active traders unless you adapt them somehow.

On the other hand, if you have a job and a family and a house to take care of and are happy just to beat the return on a T-bill then Ponsi's your man. You just can't make a living with his methods.
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Most Recent Customer Reviews

4.0 out of 5 stars very good forex learning book to add to my collection
The only reason i wouldnt rate this book a 5 is because some of the strategies discussed are already readily availible on the internet. Read more
Published 4 months ago by K. Johnson

4.0 out of 5 stars Direct and to the point
This book is very much to the point and written in human readable way, not delving into abscure mathamatics and graphs.
Published 4 months ago by Noam Erlichman

4.0 out of 5 stars It is what a good book should be
The book is intended for beginner traders or traders who are struggling with their strategies.

I cannot say if the concrete strategies are actually profitable or not,... Read more
Published 5 months ago by Felipe Cardona

5.0 out of 5 stars Forex guide for both new and experienced traders
Have read several books on Forex, but by far, I find this book by Ed Ponsi to be most beneficial to me. The easy to follow guide and examples are simply great. A great book.
Published 6 months ago by Syed Ali Sickandar

3.0 out of 5 stars Way overpriced for what you get
The information in Ed's book is actually fairly good. However, I learned most of it - often in better detail and made clearer - on freely available websites. Read more
Published 11 months ago by Books are a GOOD thing!

5.0 out of 5 stars forex patterns and probabilities
I found this book very useful. It was what I wanted & needed to know. i have purchased many books but this book explains things that a trader should know in easy to understang... Read more
Published 14 months ago by George Palsa

4.0 out of 5 stars Making Money in Your Underwear
This book came highly recommended here on Amazon. I have already recommended it to my brother who is also an investor (he's in stocks). Read more
Published 15 months ago by Bigtbizllc Bigtbizllc

5.0 out of 5 stars Worth every penny
Gives you a unique perspective of trading. Large parts of it can apply generally to all trading. Clearly explains the difference between trading Forex and other instruments such... Read more
Published 15 months ago by BookLover

5.0 out of 5 stars BJ, New York
If you are new in forex trading and want to learn trading then this book will put you on right track and direction. Read more
Published 15 months ago by B. Jat

4.0 out of 5 stars great book
great book but i think it's a little too expensive. it's a big help to anyone wanting to better their trading skills.
Published 16 months ago by esanchez81

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